Fuel up P4/l next week, government warned of ‘dissatisfaction’ with rising prices
Pump prices are expected to rise by as much as P4 per liter next week following the decision of the Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut production.
Tuesday’s anticipated oil price hike will end five consecutive weeks of rollbacks—and stoke fears of rising inflation anew, as indicated in a Pulse Asia survey released this week.
Meanwhile, with the upcoming closed fishing season for sardines, canneries are seeking a P3 to P5 increase in the retail price of canned sardines—a staple of many poor Filipino families—after projecting fish scarcity at 72,000 metric tons (MT) over the three-month season.
The group noted the impact as well of the increasing prices of other manufacturing inputs.
Canned Sardines Association of the Philippines (CSAP) executive director Francisco Buencamino said at least eight canneries are poised to submit their petition to the Department of Trade and Industry (DTI).
Rino Abad, director of the Department of Energy’s Oil Industry Management Bureau, said the oil price hike would be implemented across all products.
“Pump prices of all products will go up. Gasoline is less than P1, diesel more than P4, and kerosene more than P2 as of Thursday,” Abad said.
OPEC+ announced a production cut of 2 million barrels per day starting next month to push up oil prices after its Oct. 5 meeting.
World oil prices dropped slightly above $80 per barrel from a high of $120 per barrel in the previous months due to global recession fears.
On Oct. 4, the oil companies cut the prices of gasoline by P0.40 per liter, diesel by P0.45 per liter, and kerosene by P0.85 a liter.
These resulted in the total year-to-date net increase of P14.45 per liter for gasoline, P28.95 per liter for diesel, and P23.25 per liter for kerosene.
Earlier this week, Pulse Asia said 66 percent of respondents in a September survey said containing inflation was the most urgent issue for the national government to tackle. Forty-two percent of the respondents also said they disapproved of the administration’s efforts to tame inflation.
Pulse Asia President Ronald Holmes said if left unchecked, the problem of inflation could lead to general dissatisfaction with the administration as a whole.
He added that the survey should signal to the administration that it must step up its efforts to control inflation.
Meanwhile, House Deputy Minority Leader and ACT Teachers Partylist Rep. France Castro said the recent Pulse Asia survey should be a wake-up call for the Marcos administration.
House Speaker Martin Romualdez, on the other hand, asked the public to be more patient, saying the government is addressing the situation, which he blamed on external factors, including the strength of the US dollar vis-a-vis the Philippine peso, the increase of the price of crude oil in the world market and disruptions in the supply chain caused by the COVID-19 pandemic, and Russia’s invasion of Ukraine.
“Singly, each of these events already puts pressure on inflation.
Their confluence makes matters worse for all consumers throughout the world,” he said.
The Philippine Chamber of Agriculture and Food, Inc. (PCAFI) proposed reviving the consumer Price Watch to better monitor the behavior of consumer goods and track any attempt aimed at deceiving consumers.
“This committee will serve as a guide for all to the right pricing of agricultural commodities. It is better for all of us to know the data, so we can see if there are instances of price manipulation,” said PCAFI president Danilo Fausto during the regular Usapang Pagkain forum held Friday.
Price Watch, composed of producers, retailers, importers and government representatives, has been in hibernation for over three years now.
The group has recently forwarded its second aide-memoire to the President, in his capacity as the concurrent Agriculture secretary.
The document called on the President to stop the importation of 416,000 deboned chicken, to avoid further displacement of poultry growers.
The imports are about a third or 34 percent of the projected output of the local poultry industry, as estimated by the Bureau of Animal Industry (BAI).
Stakeholders said the importation, sanctioned by the Department of Agriculture (DA), has compromised local output as local farm gate prices of chicken have gone below break-even cost, prompting poultry growers to stop production.
“While there is a need to import mechanically deboned meat (MDM) since they are not locally produced, deboned chicken is passed on as chicken fillet or chicken meat directly competing with our local chicken production, which is 97 percent sufficient to supply local demand,” Fausto said.
PCAFI have also asked for budgetary support to the seaweeds industry and policy support for the fisheries sub-sector in relation to the enforcement of the fishing ban on sardines starting end-November 2022 to end-February 2023.
CSAP’s Buencamino said that while price adjustments have been kept at minimum levels, the recent adjustments were not reflective of the true cost of production that prompted canned-fish manufacturers to seek another price increase.
The group noted that the DTI has been pushing back prices through the department’s suggested retail price (SRP) bulletin, the price monitoring guide for basic necessities and prime commodities.
“That is understandable given that canned sardines are part of the so-called social commodities. What we noted, however, was that we filed for a price increase in 2019 but we got it in 2022, and the adjustment was barely enough for stakeholders to be profitable,” Buencamino said.
Compared to canned sardines pricing in the region, the Philippines’ pricing is about double, and at times, triple the price in ASEAN.
“The SRP of the DTI forces us to force down the price of sardines as a social product. That’s wrong but they’re doing it. They’re not looking at the viability of the businesses. They’re only looking at brownie points they earn from the public that they can force manufacturers to lower the price,” Buencamino said.
He also said the DTI should not assume companies were hoarding if they find big hauls in cold storage during their surprise visits, as this is the industry’s effort to buffer stock for the closed months.
For three months starting Nov. 31, the Bureau of Fisheries and Aquatic Resources (BFAR) will enforce the closed season for sardines fishing, restricting commercial fishers from harvesting sardines to allow the species to repopulate as part of sustainable fish management.
The looming shortage of “tamban” or sardines due to the upcoming closed season may prompt stakeholders to seek permission to import them.